Outside IR35 Roles Limited

Paying your spouse a salary – what to consider

When you are in business and are setting up for the first time, or you have been running your company for a while, you might be considering if you can pay your spouse a salary through your company? If so, how much can you pay them as a salary? These are questions that pop up quite often from contractors, and the good news is you can, although you will need to take an overall look at your business to see if this something that you would like to do.

When you are running your own company, you may also be an employee in your business. As a contractor and the main income generator, you may also be taking a director’s salary. Some business owners will ask their accountant can I pay my spouse a salary and will this help reduce company taxes. If your spouse is going to do some work for your company, you can make them an employee and pay a salary for any work that they do.

Depending on what your spouse earns, it may also be an idea to consider making use of the transfer of the Marriage Allowance. READ MORE

Electric & hybrid cars for limited company directors

Today, electric and hybrid cars are fairly new on the scene.  Indeed, as time moves forward, these should become more energy-efficient and more friendly to the environment.

The government sets the company car tax rates in the UK. They design these to encourage company car drivers to choose vehicles with lower levels of CO2 and (from April 2018) NOx emissions.

Incentives are offered both to the employer and the employee when they choose low emission vehicles such as electric and hybrid cars. Indeed, at the moment it is tax efficient to buy or lease an electric car through your own company. READ MORE

Recharging expenses – learn how to do this correctly

If you are a UK contractor who is running your own company, as part of working for your client, you may incur expenses on behalf of them. If this is so, you may be allowed to recharge some of the expenses that are connected to the supply of goods or services that you provide to your client.

How though, do you correctly recharge the cost of your expenses when you invoice your client?

This is a common misunderstanding amongst contractors and small business owners, and it is not necessarily easy to discover how to do this correctly. Also, in most cases, your client will not make it clear how you should be doing this. Furthermore, if you research this on the internet through HM Revenue & Customs’ (HMRC) website, it is also not very easy to locate. READ MORE

Business gifts – learn when they are tax deductible

Are business gifts to clients or staff tax-deductible? Many business owners, including contractors, will during the course of year, look to buy their clients a gift to say thank you for the work provided to them. As a result, they will need to know are client gifts tax deductible. A business owner may also look to buy gifts for business contacts at Christmas time and therefore also wonder if Christmas gifts to clients are tax-deductible. The general rule here is that business gifts are not tax-deductible as they fall under the same bracket as entertaining costs.

Entertaining costs do not attract tax relief for your company. It is, however, better for your business to pay for these but they must be for business entertaining to count as a business expense. If you pay for these yourself, you pay for them out of your income. Your own personal income has already had tax applied to you on a personal basis. Therefore, the same concept applies to gifts as long as they are in line with the guide below. READ MORE

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